Business Management Stories That Resonate for Health Care

Two recent stories about business management in the US have a certain resonance for health care.

The first, from the Associated Press (via CBS here) was about the downfall of Robert Nardelli, the CEO of Home Depot, once a renowned big-box retailer of hard-ware and home improvement supplies.

Nardelli believed in centralizing functions and running a tight ship. Profits and revenue soared under his six-year tenure, but customer service was often a sore spot. Some Home Depots looked tired and disorganized, and finding an employee to help locate items could be a chore at times.

Industry observers say Home Depot would benefit from allowing store managers more of a say in serving their local markets and by improving the morale and training of its employees. Analysts suggest the company return to some of the strategies that made it so successful in the 1990s.

'Instead of having people that really knew electric, knew carpentry and were around to help you, they disappeared,' Sonnenfeld said, noting that Home Depot's salespeople 'ended up to be overworked store clerks you could get anywhere.'

Finkelstein said successful retailing is about picking the right products, marketing them and selling them.'There's not a lot of science that goes there,' he said, adding that Nardelli, who had spent a good part of his career rising through the ranks at General Electric Co., might not have been the best fit for Home Depot.

The second from the Wall Street Journal was about how some American Airlines airplane wounds up sitting on the ramp for something for hours (more than 10, in one case), with toilets overflowing and passengers near hysteria.

How does this happen? After years of cutting staff, carriers are less capable of handling crises -- from not having enough telephone reservationists to handle calls, or extra bodies to empty toilet tanks or spare pilots and flight attendants to help out when delays stack up.

In the case of Flight 1348, according to interviews with four passengers plus officials at American, the problems were compounded by a lack of staff, the result of cost-cutting and holiday vacations, and some bad decisions.

Sound familiar? We have frequently discussed how economists urged breaking the "physicians' guild" and handing control of health care over to managers in order to cut costs. Current day MBA schools seem to teach that the same skills and techniques are appropriate to manage all kinds of businesses, from hard-ware retailers to airlines to hospitals, and that business managers need not be too familiar with the particulars of the goods or services their business is supposed to be supplying.

And throughout the business world, the mantra seems to be cutting costs, often by cutting the number of or hiring less experienced and trained line personnel. Of course, no one ever seems to be thinking about cutting costs by cutting compensation to the top hired managers. Much has been made of the $200 million "golden parachute" Nardelli received for his less than stellar management work. But Hank McKinnell of Pfizer Inc., the world's largest drug company, got an even bigger compensation package when he was forced out after his company's stock lost even more value than did Home Depot's.

So we see hospitals with fewer nurses, primary care physicians over-worked, under-paid, demoralized, and threatened with replacement by nurses and physicians' assistants (see post here), and the hiring of drug representatives not with pharmacology doctorates, but with experience as cheer-leaders (here). (Meanwhile, we see hospital, managed care, and pharmaceutical executives, many with little previous experience in actually providing health care, clinical research, or making pharmaceuticals, hauling in ever higher compensation.)

Isn't it time to start hiring business managers who actually know something about the front-lines of the companies they lead? And isn't it time to start thinking about hiring enough and well-trained enough people to do front-line functions, and actually paying and treating them decently? Those who run health care should heed this commentary by Mitch Albom in the Detroit Free Press which concluded, "American business has created a subclass of elitists -- CEOs and the board members who OK their salaries. And these people seem to think that money is just something to be handed out. We're good with that. Just start handing it out at the bottom. You'd be amazed at how well your company works when you pay people for coming in, rather than for leaving."

Two Cases Demonstrating the Reluctance of Medical Journals and Scientific Meetings to Air Criticisms of Vested Interests

Two follow-ups on stories recently discussed on Health Care Renewal demonstrate how hard it is to openly criticize the powers that be in health care in the venues on which most physicians depend for clinical and scientific information.

The American Society of Hypertension Panel on Conflicts of Interest

Last week we had posted about how the American Society of Hypertension had cancelled a scheduled panel discussion at its annual meeting about conflicts of interest and industry influence, after Society leadership decided the panel was too unbalanced. However, although the panel was likely to be critical of industry influence, it would have occurred at a meeting with considerable industry participation.

Now Christopher Rowland reports in the Boston Globe:

The American Society of Hypertension , accused by its critics of stifling debate, has reversed course and says it will host a panel discussion this spring on how pharmaceutical companies influence medical journals and societies.

After the cancellation was reported by the Globe last week, the society's associate executive director, Melissa Levine , said in an e-mail that the society had now decided to add the panel discussion to the agenda for the May meeting in Chicago.

The society is 'committed to conducting a session on conflicts of interest,' Levine said. 'Over the next few weeks we will be working to finalize the session and confirm the speakers.'

But the inclusion of drug industry defenders led one of the original invited panelists, Dr. Marcia Angell , former editor of the New England Journal of Medicine, to question the society's motives, even though she is considering taking part in the session.

'It seems to be standing the whole thing on its head,' said Angell.

She said the original intent of the panel had been to provide a counterweight to the drug industry's sponsorship of scientific papers and physicians at the annual meeting.

The industry advocates added to the panel are Dr. Thomas P. Stossel and William F. Keane.

Stossel, a Harvard Medical School professor and codirector of the hematology division at Brigham and Women's Hospital, said he has tentatively accepted an invitation to participate. He said he looks forward to the chance to defend drug industry involvement in medical societies.

Keane is vice president of clinical development at Merck & Co. Inc. Merck confirmed yesterday that Keane has been invited to present a lecture on 'industry/professional society relationships' but did not say whether he will accept the invitation.

Stossel said yesterday he would use the panel discussion to argue in favor of continued drug company participation and direct financial support of medical societies and doctors.

'There has been 20 years of unopposed air time of this anti-industry, anticommercial criticism,' Stossel said.

As we noted earlier, there is likely to be considerable commercial presence at the ASH meeting. At least 70 commercial exhibitors are expected in the exhibit hall. The Society is offering a variety of opportunities for corporate sponsorship of various meeting activities. Doubtless, many of the research projects to be presented were funded by industry, and many of the presenters are employed part-time by industry as consultants and on speakers' bureaus. Yet the Society seemed worried that a single panel presentation might exclusively present critics of industry, so it had to add an industry representative and an academic who has been an uncritical defender of industry to it. There may be some criticism of some practices by the pharmaceutical, biotechnology, and device industries in the media, but this case demonstrates how hard it is to criticize industry in more professional health care circles.

The "Defanged" New England Journal of Medicine Article on Epoetin

Last week, we posted about how the New England Journal of Medicine spiked a commentary by Dr Robert Steinbrook, one of its "national correspondents," that included discussion of commercial involvement in the National Kidney Foundation guidelines that promoted aggressive use of epoetin in anemic patients with renal failure. Instead, the Journal published a commentary by an author who has ties to the National Kidney Foundation, and which did not discuss or criticize the Foundation's commercial support. Steinbrook's commentary was eventually published in Lancet. [Steinbrook R. Haemoglobin concentrations in chronic kidney disease. Lancet 2006; 368: 2191-2193.]

This week the New England Journal of Medicine published another commentary by Dr Steinbrook entitled "Medicare and Erythropoietin." [Steinbrook R. Medicare and erythropoietin. N Engl J Med 2007; 356: 4-5. ] This version omitted any discussion, much less criticism, of industry involvement in these guidelines. Conspicuously absent was this passage found in Steinbrook's Lancet commentary:

Over the past decade, National Kidney Foundation guidelines have improved the clinical care of patients with chronic kidney disease in many areas, including vascular access and the adequacy of dialysis. They have, however, been questioned for their reliance on expert opinion and because of the close relations between the Foundation, the Kidney Disease Outcomes Quality Initiative (KDOQI) that formulates its recommendations, and the drug industry. In fiscal year 2005, according to its annual report, the Foundation received $19·7 million—57% of its total support—from various 'corporate and organizational partners'. In calendar year 2005, it received $4·1 million from Amgen and $3·6 million from Ortho Biotech, a subsidiary of Johnson & Johnson, the current marketers of epoetin products in the USA. Amgen supported the development of the anaemia guidelines and is acknowledged as 'the founding and principal sponsor of KDOQI.' 11 Of the 18 members of the workgroup, two-thirds disclosed financial associations with Amgen or other epoetin manufacturers or marketers. In an October, 2006, fact sheet, the Foundation responded to 'some controversy [that] has arisen due to the fact that KDOQI guidelines have been supported by industry. The NKF continually reviews its policies and procedures to safeguard the work product of KDOQI and to ensure that no sponsorship funds contributed to the NKF ever influence the content of any of the KDOQI guidelines.'

Steinbrook recommended,

Physicians and dialysis facilities need updated guidance about the management of anaemia and what is best for patients. Given the billions of dollars at stake for the drug and dialysis industries, such guidance is likely to receive the broadest acceptance if developed without industry support, and by experts without relevant financial associations. This might be accomplished under the auspices of the National Institutes of Health Consensus Development Program or the Agency for Healthcare Research and Quality.

Such a recommendation also did not appear in the New England Journal of Medicine article.

So it also seems that the New England Journal of Medicine could not bear to publish any discussion or criticism of commercial involvement in this particular instance of guideline development.

[Hat tip: GoozNews. As Merrill Goozner said, the Steinbrook article may have been "unspiked," but it surely was "defanged" in the process.]

Summary

Many physicians learn about clinical medicine, clinical science, and health policy from prominent journals and by attending prestigious scientific meetings. Yet these journals and meeting often are supported by commercial firms and other organizations with vested interests. These well-reputed fora, often regarded as objective, seem singularly reluctant to allow discussion of the role of commercial funding and influence in their proceedings. So not only are physicians who depend on these traditional sources of information likely to be exposed to information that is influenced by those with vested interests, they are unlikely to be exposed to any criticism of the biases that may thus arise.

Of course, in this age of the internet, there are other ways they may yet be exposed to such criticism. The longer the traditional journals and meetings try to pretend such criticism does not exist, the less trust they will inspire.

Leadership Position in Health Informatics: MD's Need Not Apply?

My colleague Roy Poses writes about deliberate malfeasance in the healthcare sector. I write about overconfidence and recklessness in management circles in the same sector, focusing on healthcare IT. This overconfidence is an equally expensive and damaging phenomenon that, like Roy's "anechoic effect", has unfortunately been an area where substantive, critical discussion is taboo. This taboo comes, I might add, at the expense of patients.

In this example, one can only scratch one's head at a management ideology that, in essence, operates on the principle that in managing technology investments of hundreds of millions of dollars and a major cultural shift to electronic medical records, a difficult shift that has often proven perilous, there's such a thing as too much talent within an organization.

Some tough questions and observations for the Healthcare Management world:

Read the job description below, posted to the website of the national organization for informatics in the U.S., seeking a Director of Informatics at a large multistate, multihospital organization, and then the requirements: "Previous clinical experience and a Bachelors Degree in a clinical area are required." This certainly appeared to be a minimum requirements specification, considering the scope of the position and the expertise called for as follows (I changed numbers and removed the name of the organization):

Confidential Position Specification
Director, Clinical Informatics

Our client is a multi-institutional [religious denomination] health system headquartered in the greater [large city] area. The system includes 46 freestanding and hospital-based long term care facilities, 28 acute care hospitals, 44 home health/hospice agencies, 3 long term acute care hospitals, 14 assisted living facilities, 7 continuing care retirement communities, 4 behavioral health and rehabilitation facilities, and numerous ambulatory and community-based health services. Incorporating ## states, from [state 1] to [state 2], the system employs approximately ##,### full-time employees.

A new position within the organization, our client is seeking a Director, Clinical Informatics to help lead and define of the clinical IT vision and roadmap for the organization. He/she will drive the direction for clinical information systems by facilitating councils, educating internal stakeholders, conducting research, tracking industry trends, monitoring government sponsored initiatives and collaborating with clinical and IT leaders to plan, develop, implement and monitor the effectiveness of advanced clinical systems. In collaboration with the corporate and local senior executive team, as well as, clinical and IT leadership, this executive will provide thought leadership for clinical system initiatives in support of organizational goals to improve patient safety, quality of care, operational efficiencies, patient/physician convenience, patient, physician and colleague satisfaction as well as meet regulatory requirements, such as JCAHO and other industry accepted standards.

The candidate will be a highly talented professional with a strong executive presence who will bring a broad knowledge of the healthcare information technology industry and an in-depth understanding of current state of clinical system development and adoption, and evolving third party clinical data services and knowledge resources. One should have progressive experience successfully managing clinical information solutions in a multi-hospital environment and/or healthcare IT consulting organization using a defined project management methodology. Specific experience implementing clinical documentation systems, CPOE, and ambulatory electronic medical records (EMRs) is ideal.

Previous clinical experience and a Bachelors Degree in a clinical area are required.

Note that nowhere in the job ad is formal postdoctoral education in medical informatics called for, such as is sponsored and paid for at a number of prominent universities by the U.S. National Institutes of Health, and provided at many other private universities on their own funds.

The tough questions and candid observations start now:

Do this healthcare organization's executives think they have nothing to learn from the NIH about healthcare computing? Do they know about these training programs? Should they know about them? If they don't know, why not? If they do know, do they think such credentials not worth specifying? Do they hire neurosurgeons in the same way? If not, why not?

Putting the above issue aside, when I inquired about this role with the large national firm's recruiter retained by the healthcare system to conduct the search, I received an initial positive response on my voice mail the very next morning. Then, I found I could not contact the recruiter for several days, only getting voicemail, and the recruiter was not returning my calls.

I finally reached the recruiter yesterday, and the the response I received was unexpected and disappointing: "the organization was looking for a nurse and they would not even talk to a physician." Then just to rub salt into the wound, I was then asked if I could provide 'leads' to nurses qualified for the role. (Of course, for free.) This was a simply stunning request in context.

Not being in the business of supporting large recruitment companies with gratis leads, I suddenly suffered an acute amnesia...

In any case, the MD exclusion was a surprise. The ad certainly didn't say "MD's need not apply", but it seemed it should have. I have nothing against a nurse-informaticist for this role, but let the competition for the role be fair and inclusive, not biased based on one's degree!

How to explain this?

Was there a "preferred internal candidate" who just happened to be a nurse with a bachelor's degree? Is this yet another way healthcare management will try to usurp physicians, through control of clinical IT via nursing or other specialty group? Does it reflect lack of knowledge about MD informaticians? Was it a skimping on compensation - a very, very bad area in which to skimp? (I have always marvelled at the utter stupidity of organizations that skimp on salaries for specialists whose function will make or break millions of dollars of technology and affect patient lives, while of course rewarding non-clinical executives with lucrative packages.) Was it my background that scared the daylights out of the CIO or other officer there? Or does the MD exclusion reflect someone's sheer lack of competence about what is really needed for successful clinical IT implementation? You be the judge.

I inquired of the organization's CEO and CIO about this MD exclusion which I considered rather unusual. I am always astonished to observe that healthcare Informatics often seems like Bizarro World:

In the Bizarro world, a cube-shaped planet known as "Htrae" ("Earth" spelled backwards), society is ruled by the Bizarro Code, which states "Us do opposite of all Earthly things! Us hate beauty! Us love ugliness! Is big crime to make anything perfect on Bizarro World!". In one episode, for example, a salesman is doing a brisk trade selling "Bizarro bonds. Guaranteed to lose money for you". Later in this episode, the mayor appoints Bizarro #1 to investigate a crime, "Because you are stupider than the entire Bizarro police force put together". This is intended and taken as a great compliment.

Here are the responses I received to my inquiry about physician-informaticist exclusion from a Healthcare Informatics leadership role in a large healthcare system:

[From a Sr. HR Associate]:

Thank you for your interest in our Director of Clinical Informatics position here. We are working with [recruiter] at [recruiter firm] in the recruiting for this position. Please contact [recruiter] regarding your interest in this position. Thank you again for your interest in [our organization].

Are they a little confused here? I replied to the Sr. HR Associate, with CC: to the CIO and CEO.

Dear [Sr. HR Associate]:

It was indeed[recruiter] who told me of the MD exclusion. As Member at Large of the AMIA Clinical Information Systems working group, and as former Director of Clinical Informatics at Christiana Care Health System in Delaware and an informatics leader at Merck & Co., Inc., you can perhaps understand my interest in the exclusion. I write about informatics strategy in national publications. I would be interested in the rationale for MD exclusion.

I then received an email from the Chief HR Officer:

[From Chief HR Officer]:

I am responding to the email you sent to [our CEO] regarding the above-referenced position. Thank you for sharing your perspective on our search and the possible field of candidates. Our focus on candidates with a nursing background is driven by several factors. Our preference is to have a nurse or physician in this position as they can provide the broad clinical knowledge and leadership compared to other focused clinical specialties. Unfortunately, [our] salary structure for this position is lower than that of credentialed physicians who have practiced medicine. While physicians working in an academic setting may find the salary range for the position acceptable, we have a preference for candidates with direct patient care experience who can relate to [our] clinical leaders about their operational realities. [We are] fortunate to have [name] in the CMO role as [name] is able to provide physician IT leadership based on his prior experience at [another large organization]. With these factors in mind, [our] Chief Information Officer decided to focus our recruiting efforts on qualified candidates with a nursing background. However, we are not opposed to considering physicians that meet the qualifications and are amenable to compensation within our salary range. This has been discussed with the search firm assisting [us] to fill the position. We welcome your suggestions of candidates for consideration, and thank you again for sharing your perspective.

Guess it didn't matter that I have all of the above, as it is - academia, industry, patient care, IT, NIH postdoctoral fellowship in medical informatics, etc. Unfortunately, this spin-control-sounding response raised more questions than it answered, such as (for starters):

1. Regarding a preference for candidates with patient care experience as opposed to academic settings - what physician would not have had patient care experience in academia?

2. What is so unusual about their hospitals and other facilities that they require "special experience" to "relate to" clinical leaders and operational realities - is something unusual going on at them?

3. Is there something strange about their operational realities that are untenable for people who've spent some time in academia? Does academia make them unable to handle the realities? Is so, this is unusual, and it would be good to know how this could happen, because if so, we need to fix it! (We can't have doctors who can't relate to operational issues after spending time in academia.)

4. Is the amount of leadership needed to be provided so small and so insignificant as to be easily performed by one CMO? That presumes that this amount of leadership will not grow, expand, or be a significant burden on the CMO.

5. If an organization is serious about recrutiting, shouldn't there be a good understanding about who they want to hire, and shouldn't they act transparently in a way that cannot be perceived as deceptive?

6. Is this a decision based on cost-cutting, and not a decision based on providing excellence in care? Don't hospitals have a public responsibility to provide the latter? In my experience I have seen actions taken by CIO's to cut costs at the expense of quality of medical care.

7. "We are not opposed to physicians" - that they should even consider "opposition" in the same sentence as "physician" betrays some sort of bias in hiring policies highly inappropriate for a hospital.

8. "With these factors in mind, our CIO decided"... since some of these factors are incorrect, the CIO perhaps needs to reconsider his decisions. Clearly one sided and provincial, making a decision on weak factors can only result in a weak decision. More effort and care should have been spent on defining the premises and analyzing them behind the formulation of this position.

9. What expert in the field of Medical Informatics was consulted with, or did this organization feel there's nothing these experts have to tell them?

10. Why do they say nurse or physician on one part, but then that the CIO prefers a nurse? Clearly this response does not articulate in a focused manner what they want. Perhaps they need to go back to the table and reach a clear, lucid concensus on what they want to do.

11. While they have the prerogative to run their hospital as they see fit, they also have the obligation to run it in the best possible interests of the public, something other private institutions are not obligated to do. Irrespective of who owns the organization, because the public interest is at stake, critical decisions they make need to be able to withstand scrutiny by the public.

12. Corporate spin control mumbo jumbo is not a confidence builder; rather, it is an indication of subjectivity and even perhaps duplicity.

I'd addressed most of the quite unoriginal points in the HR response almost a decade ago on a page entitled "Fighting stereotypes and politics that impede informatics leadership" such as:

We don't need Medical Informatics here

Medical Informatics is too academic

Medical Informaticists are "techies"

Medical Informaticists need to be seeing patients

Doctors don't do things with computers

Doctors don't have enough experience

Doctors don't have IT leadership skills

Doctors don't understand business

Doctors don't have personnel management skills

Doctors are not team players

Doctors can't manage projects

Doctors don't think strategically

Doctors in clinical computing projects should report to MIS

Doctors are cheap

Doctors are stubborn and uncooperative

Clinical IT would work if it weren't for doctors

The only thing that's clear is that the MD exclusion originated with the CIO. Seems the CIO felt one doc was enough (god forbid two docs leading clinical IT).

My response was polite but firm:

Dear [Chief HR Officer],

Thanks for the response.

My concerns did not have to do with your selection of qualifications which is certainly your organization's prerogative. It had to do with submitting my expression of interest and receiving a next-day positive response from the recruiter. Then, several days later after her not returning my calls (I presume your organization reviewed my resume during that period), I reached her and was simply told your organization "was not seeking physicians." Period, end stop. The recruiter was rather final about it and immediately asked if I could refer nurses to her. That was surprising and disappointing, to say the least.

Just as it is your organization's prerogative to make decisions about hiring, I live up the road from one of your hospitals and in that regard am a stakeholder. I think we can agree it is my prerogative to express myself. I intend to write your Board of Directors about what I feel is an interestingly-timed about-face on your organization's part, and on the overall strategy as you outlined below for such a critical change transformation as clinical information technology.

Finally, I received this from same Chief HR Officer:

[From Chief HR Officer]:

While you have an absolute and unfettered right to contact our Board, I want to assure you there has been no “interestingly-timed about-face” on this matter by [us]. Until your email below informed me, I was completely unaware of your interest in the position. We are in the early stages of the search and we have reviewed no resumes to date. As is typically the case, resumes are not presented until a slate of candidates has been developed. I will contact the firm to discuss their process and to review our requirements. I regret that you were given an incomplete response. Thank you for sharing your perspective.

To which I replied:

Dear [Chief HR Officer],

The recruiter indicated she spoke to someone in the organization before saying [your organization] was not looking for a physician informaticist. It sounds like there are multiple breakdowns in communication. That said, I thank you for the response.

Is this a "doctors don't do things with computers" moment, mismanagement, territoriality, miscommunication, ineptness, or above-board, state-of-the-art strategic and tactical planning for major healthcare informatics activities in a large healthcare system?

I report, you decide.

-- SS

The "Suits" Win Again: How the "Big, Bad, Greedy Pharmaceutical Company" Used One Drug to Hike Another's Price

Here is a little more enlightenment about why the price of health care is so awfully high, from the Wall Street Journal, the example of how Abbott Laboratories elevated the price of Kaletra.

First, let me provide some background. Protease inhibitors revolutionized the treatment of HIV infection. Norvir (rinoavir), manufactured by Abbott, is a protease inhibitor that became popular as part of combination therapy with other drugs for HIV, but was not used alone. Kaletra was introduced by Abbott in 2000 as a single pill that combined Norvir with another protease inhibitor, lopinavir. But in 2003, Kaletra began losing sales to the combination of a new Bristol-Myers-Squibb drug, Reyataz (atazanavir), with Norvir.

In the fall of 2003, Abbott Laboratories grew worried about new competition to its flagship AIDS drug, Kaletra. Then it seized on an unusual weapon that helped Kaletra's global sales top $1 billion a year, even as it exposed Abbott to criticism that it was endangering patients.

The weapon was an older Abbott AIDS drug called Norvir. It is a key part of drug regimens that include rival companies' pills. Previously undisclosed documents and emails reviewed by The Wall Street Journal show how Abbott executives discussed ways to diminish the attraction of Norvir, with the goal of forcing patients to drop the rival drugs and turn to Kaletra.

Norvir represents a twist in which a company took advantage of its monopoly over one drug to protect sales of another, more profitable one.

As Reyataz began gaining market share, Abbott executives considered ways to protect Kaletra sales. On Sept. 6, 2003, Jeffrey Devlin, Abbott's HIV marketing director, emailed a slide presentation to a colleague that discussed two options: quintupling Norvir's price, or withdrawing Norvir pills from the U.S. market and leaving only the liquid version of the drug.

The pill withdrawal option would dramatically improve Kaletra's sales and cripple Reyataz, the presentation predicted, because the drug regimen that included Reyataz would suddenly become more expensive. It forecast that U.S. sales of Kaletra would grow by 20% to 30% between 2004 and 2006, while U.S. prescriptions of Reyataz would fall by 28% to 54% over the same period under the scenario. Anticipating that people would wonder why the Norvir pills were suddenly unavailable, the document recommended telling the American public that they needed to be sent 'to the developing world (i.e. Africa)' as part of a humanitarian effort.
But Mr. Devlin fretted that forcing Americans to swallow Norvir in liquid form 'will always be a tough sell.' Abbott was keenly aware of the liquid's unpleasant taste. In a deposition the following year with investigators from the Illinois attorney general's office, John Leonard, Abbott's vice president of global pharmaceutical research and development, referred to liquid Norvir as 'this fluid that has been -- I'll just say it -- characterized as tasting like someone else's vomit.'

A slide presentation titled 'HIV Communications Plan' and dated Sept. 24, 2003, reviewed the two options and added a third: pulling all formulations of Norvir from the global market. This radical step, the presentation said, would remove 'pricing from public debate' and render moot any discussion of the liquid's taste. However, it noted that Abbott's 'corporate reputation' would suffer.

As for the price-increase scenario, the document listed as a 'Pro' that health insurers might stop covering Norvir, which would hurt sales of other protease inhibitors and force patients to use Kaletra. Among the cons, it cautioned that the move would 'tarnish' Abbott Chief Executive Officer Miles White's debut as chairman of the Pharmaceutical Research and Manufacturers of America, the industry's trade group, and 'position' Abbott as a 'big, bad, greedy pharmaceutical company.'

In early October, as a second new protease inhibitor from GlaxoSmithKline PLC neared FDA approval, another internal document recommended the price increase.

Abbott declined to make Messrs. Devlin, Leonard and White available for comment. Ms. Brotz, the Abbott spokeswoman, says Mr. White, who remains chief executive, didn't know that lower-ranking executives discussed forcing Americans to take Norvir as a liquid or ending its sale altogether. She says the executives were just brainstorming and quickly discarded some of the options. These executives weren't decision makers, she adds.

However, in a court brief filed in the California case last year opposing a plaintiffs' motion to unseal the documents, Abbott said they were prepared by and for some of the most senior officers at the company as part of an enormously important strategic discussion about Norvir.'

In December 2003, Abbott implemented its final decision: a 400% price increase. Norvir's U.S. wholesale price rose to $257.10 from $51.30 for 30 100-milligram capsules. The move made Kaletra a cheaper option for American AIDS patients. It raised the cost of using a Reyataz/Norvir regimen by $2,504 to $11,187 a year. In the case of regimens requiring more than once-daily Norvir boosting, the cost rose by $5,000 or more a year. Kaletra at the time cost about $7,000 a year.

In May 2004, the National Institutes of Health held a public hearing to consider a request by a consumer advocacy group that it authorize cheaper generic copies of Norvir to be made before the drug's patent expired. The NIH has legal authority to do that in cases where it has helped fund research into a drug, but it has never used this power.

John Erickson, a former Abbott scientist who did much of the research work on Norvir, spoke in favor of the request. He testified that it was unlikely Abbott would have funded Norvir's early development without a $3.5 million grant it received from the NIH in 1988. Abbott doesn't dispute the grant was important but says it also invested its own money in HIV research, including $300 million on clinical trials of Norvir. The NIH decided in Abbott's favor, saying it wasn't empowered to determine whether a drug's price was too high.

Over time, the outcry faded. Private health insurers took a bigger blow but had little leverage, because they could hardly deny patients a lifesaving drug. Insurer Aetna Inc. sued Abbott but dropped the suit within days. Abbott also settled a suit brought by the AIDS Healthcare Foundation.

Illinois Attorney General Lisa Madigan has been investigating Abbott's price hike for three years, saying it may be an example of unfair pricing that violates the state's consumer-fraud law. A lawsuit filed in U.S. district court in Oakland, Calif., by two AIDS patients and the Service Employees International Union Health and Welfare Fund alleges that Abbott broke antitrust law by using its market power to boost Kaletra sales. The case is scheduled to go to trial in early 2008.

This would not be the first case in which a pharmaceutical company tried to leverage the price of one product on another. For example, see this post on how Pfizer meant to maintain the price of Lipitor once it went off patent, by combining it with its new drug to boost HDL (good) cholesterol, torcetaprib, a scheme that fell apart after the latter drug proved to have more adverse effects than expected. However, if nothing else, in my humble opinion, Abbott certainly did look like a "big, bad, greedy pharmaceutical company" in the current case.

The most remarkable aspect of this case was how little opposition Abbott's tactics inspired. First, where were the government agencies that are so quick to slash physician reimbursement every time the overall cost of health care goes up?

Actually, it appeared that Abbott cut the federal government a special deal.

Abbott exempted Medicaid, Medicare and state AIDS drug-assistance programs from the price increase. It also announced that it would expand its own patient-assistance program. This enabled the company to argue that the increase was being shouldered by private health insurers, not patients.

Of course, who ultimately ends up paying for health insurance? The people who have it (albeit often indirectly in the US, through foregoing salary that their employers then use to purchase their insurance). In any case, where were the managed care organizations who boast that their goal is to make health care accessible and affordable? And where were the federal enforcers of anti-trust law? Were they were too busy blaming physicians for rising health care costs to take any notice? And maybe the "suits" in managed care and the US government find it easier to go after individual, unorganized, individualistic physicians than the "suits" in pharmaceutical companies? [I salute the Illinois Attorney General for being willing to take action. Maybe she doesn't wear a suit.]

Of course, as long as the "suits" keep playing in their own sand-box together, individual physicians, and more importantly, individual patients will pay the price.

Physicians As Significant Investors in the Manufacturers of the Devices They Implant

OK, the holidays are over, so it's time to catch up.

Just before the New Year, the New York Times reported on some questionable financial entanglements among spine surgeons and the companies that make the devices they use. The main points are below, somewhat edited and re-ordered as necessary for clarity.

Spinal-fusion surgery is one of the most lucrative areas of medicine. An estimated half-million Americans had the operation this year, generating billions of dollars for hospitals and doctors.

Spinal screws are relatively simple to develop and cost only $65 to $100 to make ... often by a supplier that handles the production of screws for a variety of companies.
A single screw ... sells for about $1000....
Doctors’ taking significant ownership stakes in spinal parts makers, critics say, provides an extra financial incentive for a doctor to recommend a surgery. It may be one of the most distinct examples yet of the way monetary considerations can play a role in the way doctors practice medicine.

Such doctors face 'an awfully pernicious conflict of interest,' said Dr. Richard A. Deyo, a physician and health services professor at the University of Washington in Seattle.

About 30 start-up companies have begun selling spinal devices, including screws, in the last couple of years. And industry experts say about a dozen companies have doctors among their investors. Because most of the companies are private and the relationships are not publicly disclosed, there is no way to know how many spine surgeons around the country are partial owners of device makers.

One of the fastest growing companies is Allez Spine, of Irvine, Calif. It was founded on a business model that called for the 120 doctors who invested in Allez to serve as “its customer base,” according to a lawsuit filed by a former chief executive last April. Those doctors, who pay $50,000 or more to become investors, own two-thirds of the company, according to legal filings.

Selling the company’s screws to its “investor-doctors” was a way to “generate more profits for the company” according to a related lawsuit involving the former executive.

At one midsize Nevada hospital, a surgeon who performs many spinal fusions is an Allez investor who uses the company’s screws, said an administrator.
The identities of most of the surgeons who invest in Allez are not publicly disclosed. And the doctors who could be identified and were called for comment did not return repeated telephone calls.

Some of the new [spinal screw] companies aim to recruit surgeons who perform a high volume of back operations, according to doctors who have been approached. The exact nature of the investment opportunity is left vague in the discussions, the doctors say, with details made available only to those who agree to become investors.

One surgeon described being contacted by Globus Medical, a start-up company in Audobon, Pa. The surgeon said he was not persuaded to use Globus screws and other hardware, despite the sales representative’s mention of the 'good opportunities' available if he were to become a large user.

The policies of Globus forbid its representatives from offering stock to reward surgeons who use their products, said Dave Demski, chief financial officer of Globus.
At Alphatec Holdings, a company in Carlsbad, Calif., doctors are shareholders because they have either invested directly or are paid in stock for consulting, according to filings by Alphatec, which is one of the few publicly held companies among the small start-ups.

The chairman of Alphatec’s scientific advisory board is Dr. Stephen J. Hochschuler, a prominent surgeon who helped start the Texas Back Institute, one of the largest spine clinics in the country.

For his work as an adviser, Dr. Hochschuler received a restricted stock grant that was worth about $640,000 when Alphatec went public in June, according to the company’s public filings. Because the share price has fallen, the grant — which vests over five years — is currently now worth only about $270,000.

Dr. Hochschuler, in a written response to an interview request, said doctors should work closely with device companies like Alphatec.

Some surgeons who have bought Alphatec stock argue that their holdings are no different than their investments in any other company.

Dr. E. Claiborne Irby Jr., a surgeon in Richmond, Va., who invested in Alphatec before it went public, says he uses its devices, but not exclusively. 'I don’t change anything I do because of any kind of investment,' he said.

But federal regulators and law-enforcement officials are on the lookout for surgeons who step over the line.

Doctors 'are supposed to make the decision based on the best interest of the patient,' said Peter Winn, a lawyer in the United States attorney’s office in Seattle, who has aired his concerns in a speech to spine surgeons.

To do otherwise, he said in an interview, 'is a violation of the ethical rules, and it has been since the time of Hippocrates.'

It seems that there are an endless variety of schemes out there to financially entangle physicians with the companies that make the products they may use or prescribe for patients. It raises the question of whether physicians who own a significant proportion of a particular company can make decisions for patients about whether to use that company's products without being influenced by the consequences of such decisions on the physicians' own pocket-books?

This is just more evidence of the pervasive web of conflicts of interest that has seemingly caught up many physicians and other influential people in health care. The physicians involved ought to remember that their duties are to the patients first. They ought to select implantable devices first according to their ratios of benefits/harms for patients, and maybe second, according to price. The manufacturers of spinal devices, and other health care corporations should not put physicians in positions in which the decisions they make for patients could be influenced by the effect of these decisions on their investments.

Finally, I can't help wondering if conflicts of interest could also somehow be affecting what appears to be ridiculously high prices charged for simple pieces of hardware whose manufacture is out-sourced, and which seemingly could not have entailed much in the way of research and development costs?

Middlemen and a Health Care System Dominated by Bureaucrats and Managers

The Wall Street Journal today wrapped up its series on "middlemen" in health care. The summary article has some telling quotes, and some very important data. To start with the quotes,

A lot of the money goes more toward fattening middlemen's bottom lines than toward improving the quality or efficiency of American health care. 'At the end of the day, the only reasonable conclusion is that we waste a huge amount of money on the most nuttily cumbersome administrative system in the world,' says Henry Aaron, a Brookings Institution economist.

While the middleman business booms, health-care costs keep rising, the ranks of the uninsured grow, and paperwork expands as each party in the system tries to enlarge its slice of the pie. 'There's more money to be made by monitoring cash flow than monitoring patients,' says David Cutler, a prominent Harvard University health economist.

And here are the statistics. According to the article, the majority of people who work in doctors' offices, 1.8 million out of 3.3 million, do so in non clinical jobs. Nearly a majority of people who work in hospitals, 2.3 out of 5.5 million, do so in non clinical jobs. So currently almost 50% of people who work in what appear to be the most clinical settings are not doing clinical work.

Health care has been taken over by clerks, bureaucrats, and managers.

This appears to be the fruit of the movement began in the 1980's to break the medical "guild," which some economists held responsible for the high cost of health care (see post here).

The results has been even more rapidly increasing health care costs, decreasing access, stagnant quality, and of course, dispirted professionals tired of contending with myriad clerks, bureaucrats, and managers, most of whom do not seem to understand health care or believe in its values.

And this horrendously complex, bureaucratic non-system is a fertile breeding ground for the conflicts of interest and outright criminality we discuss so often on Health Care Renewal.

Some happy new year to us from the WSJ.

Medical Meeting Spikes Session on Conflicts of Interest

There seems to be a run of stories about academic fora rejecting discussions of conflict of interest (see most recent post here about how the New England Journal of Medicine seemingly rejected a commentary on conflicts of interest by one of its own "national correspondents.") Now the Boston Globe has published an article by Christopher Rowland about the cancellation of a session on conflicts of interest at the American Society of Hypertension (ASH) 2007 meeting. We previously discussed a controversy at the Society over industry involvement in guidelines it sponsored that featured a broadened definition of "pre-hypertension," one that seemingly would include many more patients as candidates for drug treatment. According to the Globe,

The title of the proposed panel discussion cut straight to the point: "Conflicts of Interest." But attendees at the American Society of Hypertension's spring meeting in Chicago won't get to hear what panelists have to say about financial ties between the drug industry and medical societies and physicians. The society has rejected the session, saying it was 'one-sided' and did not meet 'standards for fair balance and scientific rigor.'

Now, the cancellation itself is causing a conflict, prompting three prominent drug industry critics from Boston who had been invited to participate to accuse the society of stifling debate.

'The society is hiding under a rock,' said Dr. Jerome Kassirer, a former editor of the New England Journal of Medicine, who would have been a panelist.

The panel about conflicts of interest [would have been lead] by Jean E. Sealey, a researcher and former president-elect of the American Society of Hypertension. Sealey has said the drug industry wields too much influence over the society's activities through its financial contributions to the group and by paying for honoraria, speakers fees, grants, and research contracts with individual doctors.

But the society's leadership alleged that Sealey had her own conflicts of interest: While she served on the society's board, her husband, Dr. John Laragh , edited one of the society's academic journals.

Sealey agreed to give up her chance to be president, but was allowed to organize a half-day session for next May's annual meeting.

The group said in a statement that it sent Sealey's panel proposal to its continuing medical education review committee, which determined Sealey's plan to limit the panel to three prominent drug industry critics lacked balance. It suggested adding a Food and Drug Administration official to the roster, but Sealey refused.

In response to questions from the Globe, the society initially said in an e-mail that fair balance is required under national standards for continuing medical education programs, and that its internal continuing medical education committee was compelled to reject the panel on those grounds. In a subsequent e-mail, after Kassirer said there is no such requirement in the national rules, the society said the expectation of fair balance is 'inherent.'
Sealey said the purpose of her proposed panel was to provide a counterpoint to the many industry sponsorships and payments to physicians who are scheduled to present medical information at the meeting. At last year's meeting, she said, 100 of the 165 presenters disclosed financial ties to pharmaceutical companies.

Obviously, the American Society of Hypertension has the legal right to determine what presentations will occur at its national meeting. However, in my humble opinion, the Society's stated reason for rejecting this single panel presentation on conflict of interest was bizarre. As noted above, there is no known requirement that each individual presentation at a medical meeting must in some way be "balanced."

Furthermore, the ASH meeting seems to be one of the many medical meetings in which there is a large amount of industry participation. ASH itself has 12 corporate members, all pharmaceutical companies. At the annual meeting, high-powered pharmaceutical advertising is quite evident, and the meeting web-site includes a pamphlet to promote even more. It suggests that over 70 commercial exhibitors will participate, indicates a vast variety of advertising and promotional opportunities, and claims, "the enthusiastic response to our exhibit area from both participants and visitors affirms our belief that this is one of the most productive exhibit showcases available."

So it seems that one panel on conflicts of interest featuring critics of the pharmaceutical industry would likely be completely over-balanced by the tremendous amount of industry participation elswhere at the meeting.

This case seems to be yet another in our catalog of examples of the anechoic effect. Criticisms of the role of commercial vested interests in medical science are considered impolite in certain venues, particularly venues that unquestioningly feature a large amount of industry support. Such impoliteness is unwelcome, as it might trouble those who are otherwise happy to let the good times roll.

Medical societies, however, ought to think of what they may have sold to finance their continued rolling.

"Medical Journal Spikes Article On Industry Ties"

From the Wall Street Journal, an article that will pretty much speak for itself, with a little re-ordering and editing by yours truly. First, there was the spiked commentary,

The New England Journal of Medicine last month published studies warning that aggressive efforts to treat anemia in kidney-disease patients with the drug erythropoietin, or EPO, as recommended by the National Kidney Foundation, appear to increase the risk of heart failure and the need for dialysis. [See related posts here and here.] But the medical journal spiked an opinion piece commissioned from one of its senior writers that was critical of the foundation's reliance on multimillion-dollar donations from the companies that make such drugs.
Meanwhile, the author of the spiked editorial, Dr. Robert Steinbrook, submitted it to one of the journal's chief rivals, the British medical journal Lancet, which ran a version on its Web site on Nov. 17, a day after the New England Journal published its reports on the matter. [Steinbrook R. Haemoglobin concentrations in chronic kidney disease. Lancet 2006; 368: 2191-3.]

Dr. Steinbrook's article said that the foundation's guidelines have been questioned because of the group's close relationship with the drug industry. The article also noted that in fiscal 2005, the foundation received more than half of its support from 'corporate and organizational partners,' and, in the calendar-year 2005, it received $4.1 million from Amgen Inc. and $3.6 million from Johnson and Johnson's Ortho Biotech, the current marketers of EPO in the U.S.

The kidney foundation, which issued its recommendations earlier this year, credits Amgen as the 'founding and principal sponsor' of the guidelines. Such sponsorship is unusual -- the American Diabetes Association, for instance, says it doesn't 'receive or allow for any corporate contributions for our clinical practice recommendations.'

Ellie Schlam, a foundation spokeswoman, says Amgen's sponsorship money paid for guideline-development staffers, a $3,000 grant to each member for travel to meetings and other expenses, plus phone, faxing, copying and other administrative expenses. A disclosure on the foundation's Web site noted that most members of the guideline group have a financial relationship with either Amgen or dialysis providers, who resell EPO and stand to profit from its increased use. Still, the foundation says sponsors aren't informed or involved in any aspect of guideline development.

A spokesman for Amgen said the company is 'not involved in the creation and design of the guidelines we sponsor.'

The New England Journal declined to discuss Dr. Steinbrook's article, saying 'we discuss only content that we have published.' Dr. Steinbrook, a former deputy editor of the New England Journal, has been a national correspondent since 2002. According to a person familiar with the matter, he was told his manuscript lacked balance because it suggested that the commercial support of the guidelines influenced the medical recommendations made by that group. New England Journal editors also criticized the piece for failing to credit the guideline writers for striving to find the right balance when it comes to anemia guidelines.
Meanwhile, Richard Horton, editor of the Lancet, said 'I was surprised Robert came to us because I have admired his work for the New England Journal of Medicine.' Dr. Horton said of the article: 'We thought it extremely important -- because of the significant clinical implications and because of the questions it raised about the propriety of the arrangements over funding and guideline development.'

Then there was the more innocuous in-house editorial,

The journal did run a less-critical editorial on the studies co-authored by Julie Ingelfinger, a nephrologist and deputy editor at the journal who is the immediate past president of the Massachusetts-based chapter of the National Kidney Foundation and a member of the state group's medical advisory board. The editorial that ran made no mention of the foundation's industry funding, and Dr. Ingelfinger's relationship with the foundation wasn't disclosed.
Asked why Dr. Ingelfinger's roles at the Massachusetts Kidney Foundation weren't listed along with the article she co-authored, a spokeswoman for the New England Journal said, 'We publish financial associations that are relevant to the content of the article. We tend to be inclusive, rather than exclusive.'

Frank Davidoff, the editor emeritus of the Annals of Internal Medicine, says Dr. Ingelfinger's association with the kidney foundation should have been made known to readers. 'She should have disclosed that, even if she is the best person to write the editorial,' he said. Dr. Davidoff said medical journals historically have paid less attention to the potential conflicts of editorial writers than they have to researchers publishing original studies.

And the somewhat under-stated conclusion,

The handling of the two articles has reignited debate about the journal's standards and whether it is tough enough on issues involving industry funding of research and treatment guidelines.

Again, as we have stated before, people with conflicts of interest may not be consciously aware of the binds in which they find themselves. However, common sense, economics, and cognitive psychhology suggest people respond to incentives, including financial incentives (see post here). If a person or organization is paid by company x, how likely is he, she, or it to criticize company x's products? How likely is he, she, or it to give company x the benefit of the doubt?

Thus, at a minimum, we urge that all potential conflicts of interest affecting health care decision makers, and those who seek to influence them, ought to be fully and thoroughly disclosed. And we need to consider whether some such conflicts ought to be banned outright.

But people with conflicts, who are now prevalent in academic medicine, and various other health care organizations, are likely to find such discussions very uncomfortable. But that is just why we need to have them.

UMDNJ as a Political Sand-Box

The Newark Star-Ledger just published another in its long series of stories on the troubles at the University of Medicine and Dentistry of New Jersey (UMDNJ). As we have discussed previously, the university now is operating under a federal deferred prosecution agreement with the supervision of a federal monitor (see most recent posts here, here, here, here and here.) We had previously discussed allegations that UMDNJ had offered no-bid contracts, at times requiring no work, to the politically connected; had paid for lobbyists and made political contributions, even though UMDNJ is a state institution; and seemed to be run by political bosses rather than health care professionals. (See posts here, and here, with links to previous posts.) The most recent development (see post here with links to previous posts) was that UMDNJ apparently gave paid part-time faculty positions to some community cardiologists in exchange for their referrals to the University's cardiac surgery program, but not in exchange for any major academic responsibilities.

Now the Star-Ledger has come up with a story of some mind boggling decisions made by the former UMDNJ leadership that seemingly wasted millions on expensive building projects that now stand vacant. The article then concluded with another insightful analysis of what went wrong in the leadership culture of the university, an analysis that may generalize to other health care organizations.

First, let's summarize the blundering building projects. The first was a highly secure site to develop vaccines against biologic terror agents, which is years behind schedule because a UMDNJ leader wanted to relocate it to a piece of land owned by his neighbor. Per the Star-Ledger,

It was known as a Regional Biocontainment Lab.

It was announced in September 2003 by then-Health and Human Services Secretary Tommy Thomp son, who hailed it as 'a major step' toward providing effective vaccines and diagnostics for diseases caused by agents of bioterror as well as in fections such as SARS (Severe Acute Respiratory Syndrome) and West Nile virus.

The federal grant stipulated the project be built in Newark's University Heights, adjacent to an existing bioresearch lab operated by UMDNJ.

Memos and e-mails show that within four months, Robert A. Saporito -- then UMDNJ's senior vice president for academic af fairs -- was looking for another site, as university officials grew concerned they would be unable to find matching funds required to build the project.

The search for alternate sites was never disclosed to the public, to the political leaders who secured the money, or to the federal agency that awarded it.

Saporito was forced to resign in March after he was accused of abusing his expense account. In an interview before he left, he said changes in the original design, mandated by security concerns, led to discussions about relocating the lab. He said he explored moving the lab to Picatinny after receiving a call from William Marcellino, a developer who lived a few doors down from him in Brick Township.

When the National Institutes of Health learned about the Picatinny plan last year, the agency was clear: 'We explained to UMDNJ that alternate sites were not an option,' said John J. McGowan, an administrator at NIH.

In an August 2005 letter to the university, NIH officials complained that they had seen little progress on the project and warned 'if you are unable to show the project can be completed, we will need to begin to negotiate the return of funds.'

The next was a cancer center that sits mostly vacant.

The newest building on UMDNJ's Newark campus is a nine-story structure emblazoned with distinctive red signs identify ing it as the New Jersey Medical School/University Hospital Cancer Center.

It includes vast expanses of glass, state-of-the-art research labs, underground vaults for linear accelerators used in cancer treatment, and an outdoor garden for patients.

But no cancer treatment is going on. There are no doctors, no clinical services and no patients. While some researchers have moved in, more than half the building remains empty.

Christopher Paladino, a former university trustee, said there was never a real plan for the cancer center. He said millions were spent without benefit of any economic feasibility studies, or any examination of whether the center would actually bring in patients.

Paladino, named a trustee after the project began, concluded the center had been the product of jealousy between the school's Newark and New Brunswick campuses. In Newark, he said, there was a feeling that because the university has a cancer institute 'in New Brunswick, we should have it here.'

The article documented other expensive buildings that sit partially vacant in lieu of any realistic plans to use the space they provided. In particular,

Adjacent to the cancer center in Newark is a new, six-story building for ambulatory outpatient services completed this year. Walk through this structure, past the cool pastel walls, and there are few people. One level is vacant, as are large parts of the rest of the building.

Since before construction began in April 2003, UMDNJ officials knew they would have trouble down the road because the center was built with tax-free government bonds and money raised that way cannot be used for profit-making operations such as doctors' offices.

'The total confusion on that subject has been the major obstacle,' [Interim UMDNJ President] Vladeck said. 'We're starting to untie that knot.'

Vladeck said the complex was planned and built by people who put off the financial issues, figuring it would be constructed and 'by then, they would have to fix the problem.'

Finally, the Star-Ledger discussed a fascinating analysis of what has gone wrong with the leadership of UMDNJ.

Interviews with past and current officials indicate many projects were a product of a school that increasingly was divided into two worlds the past few years.
In one, nurses and doctors battled to provide health care in a poor, urban environment. But at the top were administrators who got their jobs through political patronage and whose basic job experience was not teaching or medicine, but state government and politics.

Paladino, who was an assistant counsel to Gov. Jim Florio, said political jobs seemed to be part of the lifeblood of the university.

'It's a Sharpe guy. It's a Rice guy. It's a McGreevey guy, or a DiFrancesco guy, he remarked, referring to former Newark Mayor Sharpe James, state Sen. Ronald Rice, and two former governors, James E. McGreevey and Donald DiFrancesco. Everyone has a guy. They don't hide from it.'

It wasn't always evil, he said, but it became a slippery slope as politicians sought comfortable jobs for their political supporters.

U.S. Attorney Christopher Christie, who is overseeing a criminal investigation into the university that was launched after a series of stories in The Star-Ledger last year, saw it all as less than innocuous.

"There were people in political life who were in charge of the budget process who made sure UMDNJ got taken care of, because they knew folks could go there and be employed,' said the U.S. Attorney. 'There was a very symbiotic relationship there between the political world and the university.'

He added that his parents once told him character was what you do when you think nobody's watching.

'UMDNJ,' Christie said, 'was the way politicians acted when they thought nobody was looking, and it's a pretty ugly picture.'

So there you have it. One fundamental problem with UMDNJ was that the University was run by people with no background or fundamental interest in health care, who did not share, even at an intellectual level, the values of health care. The leaders treated the country's largest health care university as there own political sand-box, completely disregarding its core mission, and thus completely disrespecting the patients and learners it was supposed to serve, and the health care professionals who tried to serve them.

After the revolution that turned health care over to business people, bureaucrats, and politicans, how many other health care organizations are run for the benefit of their leaders, rather than the missions they were supposed to support?

Another Electronic Medical Record Horror Story

The Wall Street Journal today published a story on a patient, Patricia Galvin, who was screwed by insurers after medical information she thought was confidential (about her psychotherapy) was divulged to an insurance company. The story is "Spread of Records Stirs Patient Fears of Privacy Erosion", Theo Francis, Dec. 26, 2006 (subscription needed; I will post a public link if it becomes available).

Here is a brief summary from this link:

Medical Dilemma: Spread of Records Stirs Patient Fears Of Privacy Erosion

Dec 26, 2006 By Theo Francis, WSJ.com

After her fiancé died suddenly, Patricia Galvin left New York for San Francisco in 1996 and took a job as a tax lawyer for a large law firm. A few years later, she began confiding to a psychologist at Stanford Hospital & Clinics about her relationships with family, friends and co-workers.

Then, in 2001, she was rear-ended at a red light. When she later sought disability benefits for chronic back pain, her insurer turned her down, citing information contained in her psychologist's notes. The notes, her insurer maintained, showed she wasn't too injured to work.

Ms. Galvin, 51 years old, was appalled. It wasn't just that she believed her insurer misinterpreted the notes. Her therapist, she says, had assured her the records from her sessions would remain confidential.

As the health-care industry embraces electronic record-keeping, millions of pages of old documents are being scanned into computers across the country. The goal is to make patient records more complete and readily available for diagnosis, treatment and claims-payment purposes. But the move has kindled patient concern about who might gain access to sensitive medical files -- data that now can be transmitted with the click of a computer mouse.

The U.S. Department of Health and Human Services implemented standards in 2003 for guarding patient privacy, supplementing a patchwork of state laws. The federal standards, which grew out of the 1996 Health Insurance Portability and Accountability Act, single out psychotherapy notes for extra protection.

Critics claim that loopholes in the rules have left patient privacy under threat. Ms. Galvin, for example, discovered that when psychotherapy notes are mixed in with general medical records, the federal rules afford them no special protection. That is precisely what happened with her records at Stanford, she says.

The article points out that complaints to HHS about breaches of medical privacy have exceeded 23,000 and that HHS presently receives about 700 new complaints monthy, while enforcement of "guarantees" such as in the HIPAA act are basically non-existent. I'd bet a large proportion of these breaches were facilitated by electronic legerdemain.

Here is my Letter to the Editor in response. I do not know if it will be published:

(Update: An edited version of the letter below was indeed published as a Letter to the Editor in the Wall Street Journal, Saturday, 12/30/06, print edition. Edited out for brevity were mention of the UK's difficulties, explicit mention of psychology information as inappropriate in an EMR, and unfortunately, mention of the HCRENEWAL blog. However, the letter was otherwise intact.)

To: wsj.ltrs@wsj.com
cc: theo@theowire.com
Date: Tuesday, December 26, 2006
Subject: Re: Spread of Records Stirs Patient Fears of Privacy Erosion

Dear Wall Street Journal,

Ms. Galvin’s fears that her most private thoughts and secrets are “mere data of a transaction, like a grocery receipt” are well-founded and truly give life to an observation I made several years ago while leading electronic medical records (EMR) implementation at a large hospital. I observed that clinical computing and business computing are entirely different specialties of computing. I felt that the dominance of EMR efforts by information systems personnel would lead to devaluation of doctor-patient confidentiality and of the doctor-patient relationship itself.

As Drucker wrote in 1999, information systems personnel have taken a somewhat peculiar view of the world, namely that the entire world operates on the principles of 19th century accounting theorem, and computerized it in a form where events are deconstructed to “transactions.” Unfortunately, as Ms. Galvin discovered to her horror, good things do not come from treating twenty-first century medical “transactions” as nineteenth century accounting data.

We’re not alone in the United States. In the UK, the ambitious Connecting for Health (CfH) national EMR project and plans for a central clinical database have been met with stiff resistance from patient advocacy groups. Plans to upload medical records onto the central clinical database will put patient confidentiality at risk, the UK program has been told by its own consultants [1]. Professor Ross Anderson, Professor of Security Engineering at Cambridge University and one of the founder members of privacy advocacy group http://TheBigOptOut.org made the telling point that people should opt out of inclusion in the national database, if only to wait and see if their government delivers the ‘protections’ that it is promising - and if it does, to see if they are sufficient and effective [2]. HIPAA must have been on Prof. Anderson’s mind.

A similar advocacy movement is needed in the U.S., for there has been an idealistic and almost reckless push in the US to put any and all healthcare information into EMR’s and other electronic databases, even when the financial and clinical benefits are unproven.

A critical issue in the Journal story that needs consideration is why detailed notes of psychotherapy sessions, of all things, were available in electronic form. This makes little sense and is entirely unnecessary. For instance, data on Ms. Galvin’s feelings and private affairs would not be needed – or even useful – to other doctors in a medical emergency. Indeed, even if Ms. Galvin switched doctors, her history would best be redone by a new psychologist in building an effective doctor-patient relationship.

In a decade when conflict of interest and mismanagement in healthcare is common [3], break-ins to supposedly secure databases appear in the news almost weekly, and dominant computer operating systems are barely able to keep ahead of hackers’ attempts to circumvent security, the dream of patient confidentiality is increasingly utopian. The reality is that the HIPAA act lacks teeth, enforcement initiatives non-existent (as the Journal reports), and stated exceptions to the HIPAA rules are prone to misuse by the powerful and those with financial incentives. These factors make it likely that the HIPAA “guarantees” are not worth the weight of the paper they’re written on.

In reality, if you want to keep information secure, don’t put it on a computer; and if you have to put it on a computer, and the computer is to be put on a network, then the information by definition is no longer secure.

These harsh realities call for a critical rethinking of the types of clinical data that should be put into electronic databases, and on governance of privacy, security and confidentiality. In the U.S. there is an office with a mandate to consider such issues, the Office of the National Coordinator for Health IT (ONCHIT) in the Department of Health and Human Services [4]. I call on ONCHIT to lead this needed rethinking in our national strategy for electronic healthcare information.

Notes:

[1] “CfH report confirms confidentiality risk,” The Register, Nov. 27, 2006, http://www.theregister.co.uk/2006/11/27/care_record_conf/

[2] http://www.nhsconfidentiality.org/?p=37

[3] Foundation for Integrity and Responsibility in Medicine, http://hcrenewal.blogspot.com

[4] Office of the National Coordinator for Health IT (ONCHIT), Department of Health and Human Services (HHS), http://www.hhs.gov/healthit/rfi.html

-- SS

More on Questionable Marketing of Atypical Anti-Psychotic Drugs

Yet more information is emerging about questionable practices used by pharmaceutical companies to market psychiatric medications.

The New York Times has continued its series about how Eli Lilly and Co. marketed its best-selling anti-psychotic drug, Zyprexa (olanzapine). Yesterday it published an article suggesting that Lilly suppressed data that suggested a relatively high rate of adverse effects from the drug, while releasing data that made the drug appear safer:

For at least a year, Eli Lilly provided information to doctors about the blood-sugar risks of its drug Zyprexa that did not match data that the company circulated internally when it first reviewed its clinical trial results, according to company documents.

The original results showed that patients on Zyprexa, Lilly’s pill for schizophrenia, were 3.5 times as likely to experience high blood sugar levels as those taking a placebo, according to a February 2000 memo sent to top Lilly scientists.

The 2000 memo indicates that it was prepared as Lilly considered changing Zyprexa’s prescription label to provide doctors with more information about the drug’s potential to raise blood-sugar levels.

According to the memo, Lilly scientists initially wanted to propose a relatively straightforward statement on the label that high blood sugar had been observed in patients taking Zyprexa in clinical trials. That change was never made.

According to the memo, Lilly had reviewed data from its clinical trials and found that 'the incidence of treatment-emergent hyperglycemia in olanzapine group (3.6%) was higher than that in the placebo group (1.05%).' Olanzapine is the generic name for Zyprexa.

But when Lilly subsequently discussed the clinical trial results with doctors, it used a different comparison. Lilly told doctors that Zyprexa had caused 3.1 percent of patients — not 3.6 percent — to have high-blood sugar. And it said that 2.5 percent of patients on the placebo — not 1.05 percent — had high-blood sugar. As a result, the rates of high blood sugar in the two groups seemed almost identical in the revised data.
Another Lilly report, from November 1999, shows that Lilly found after examining 70 clinical trials that 16 percent of patients taking Zyprexa for a year gained more than 66 pounds.

The company did not publicly disclose that figure, instead focusing on data from a smaller group of clinical trials that showed about 30 percent of patients gained 22 pounds.

A few days earlier, the Times had published an editorial on Lilly's marketing of Zyprexa.

It was bad enough when studies showed that the newest and most heavily promoted drugs for treating schizophrenia weren’t worth their high cost. Now the disturbing tale of their excessive use has taken a tawdry turn with revelations that Eli Lilly, a pharmaceutical giant, has consistently played down the risks of its best-selling antipsychotic drug, Zyprexa, and has promoted it for unapproved uses.

Although Lilly says the documents present an inaccurate picture, they offer persuasive evidence that the company engaged in questionable behavior to prop up its best-selling drug, which creates almost 30 percent of Lilly’s revenue.

Meanwhile, it was widely reported that Bristol-Myers-Squibb had agreed to settle charges having to do with problems with its sales and marketing practices, particularly of its big-selling atypical anti-psychotic drug, Abilify (ariprazole). Again, from the New York Times report:

Bristol-Myers Squibb has reached a tentative agreement to pay $499 million to settle a federal investigation into illegal sales and marketing activities from the late 1990s through 2005, the company said yesterday.

That settlement, and separate special charges the company also announced yesterday, would wipe out Bristol-Myers fourth-quarter profit.

Bristol-Myers, based in New York, declined to disclose which years, which drugs and which practices the tentative agreement covers. But Jeff Macdonald, a company spokesman, confirmed previous reports that one product involved was the antipsychotic drug Abilify, one of the company’s best sellers.

Bristol-Myers said it also expected to sign a corporate integrity agreement with regulators in the Health and Human Services Department who monitor industry compliance with federal insurance programs.

The antipsychotic drug Abilify covered in the settlement has become the company’s best-selling product outside of its flagship cardiovascular group....

There is increasing reason to fear that the basis of much current thinking about the management of major psychiatric disorders, particularly schizophrenia, is on very shaky ground. More and more of the information that pharmaceutical companies have provided to physicians appears to be dubious. And very recently, allegations surfaced that pharmaceutical companies got far too cozy with state mental health departments to develop treatment algorithms for major psychiatric disease that emphasized the use of the newest, most expensive drugs, even though it is no longer clear that these drugs are so much better than older and cheaper treatments (see post here). Note that these Texas Implementation of Medication Algorithms (TIMA) pushed five new atypical anti-psychotic drugs for schizophrenia, including Abilify and Zyprexa.

To take the best possible care of each patient, physicians (and patients) need maximally accurate and unbiased information about the performance of drugs, devices, and diagnostic tests. It may be in the financial interests of companies that make such products to gimmick the data in their favor, but such manipulation can hurt patients, and surely is an unheralded reason for the continuing rapid rise in health care costs.

It is high time to get pharmaceutical, biotechnology, and device companies out of the business of the clinical testing of their own (or competitors') products. Let these companies sponsor the basic biology research needed to develop innovative new products. Clinical research on patients to evaluate these products should be done by organizations and researchers with no horse in the race.

Guidelines in Whose Interest? - Pharmaceutical Companies and the Texas Medication Algorithm Project (TMAP)

Out of Texas comes a story with allegations of pharmaceutical industry involvement in the crafting of state mandates for the treatment of psychiatric illness. Per the Dallas Fort Worth Star Telegram (edited, and re-ordered):

A recently unsealed lawsuit accuses Johnson & Johnson and related companies, including Janssen Pharmaceutical, of conning the state of Texas into spending millions of dollars on costly psychiatric drugs.

The suit targets a controversial state program that instructs doctors at state-funded healthcare facilities about which medicines to prescribe for a variety of mental illnesses.

The suit was filed in 2004 in Travis County by Allen Jones, a former employee of the Pennsylvania Office of Inspector General who investigated drug companies' ties to his state's officials. In the process, he learned of allegations related to Texas. The Texas attorney general's office has joined the lawsuit.

While the suit does not name a "state mental health program decision-maker" who it alleges received payments and other benefits, a spokeswoman for the Texas Health and Human Services Commission confirmed that the lawsuit refers to Dr. Steven Shon, who managed the program. Shon took more than 80 trips throughout the country and abroad to promote it, with his expenses often underwritten by drug companies.
Shon, who left the Department of State Health Services this fall while the investigation was ongoing, said he has not received money from drug companies in connection with his work for the state. Money paid for his travel expenses or to reimburse taxpayers for his time away from the office, he said.

'These assertions are really ridiculous, he said.

However, Shon said he received a few thousand dollars from Janssen several years ago for consulting work unrelated to his state job. He said he got approval from the department's legal staff, but commission spokeswoman Stephanie Goodman said the agency was unaware of payments and would not have approved them.

The lawsuit alleges that Johnson & Johnson and its subsidiaries misled state officials about the benefits of the antipsychotic drug Risperdal, including promoting it for treating children when the drug had not been federally approved for such use. The company's influence led the state to purchase the expensive brand-name drug instead of cheaper generic alternatives, according to the lawsuit. The result, it alleges, was that the state paid excessive amounts in claims for Medicaid, which covers medical costs for low-income people.

A major portion of the lawsuit focuses on the Texas Medication Algorithm Project, which Shon coordinated. That program offers a series of treatment plans, or algorithms, for various mental illnesses, including which drugs to use. In many cases, the plans recommend the newest drugs, which are the most expensive and are not available in generic form.

Such drugs generate much income for pharmaceutical companies. In a recent three-year period, more than $190 million was paid in Texas for outpatient Medicaid claims for Risperdal alone, according to the state Health and Human Services Commission. During those same years -- 2002 to 2005 -- almost $700 million was spent on all antipsychotic medications combined. That does not include care for those who are in state institutions.

Drug companies, including Janssen, gave the state more than $1 million to help promote the plan. And the Robert Wood Johnson Foundation, established by the founder of Janssen parent company Johnson & Johnson, gave $2 million. A company spokesman previously said the foundation is independent of the company.

The exact amount donated by the companies remains unclear. Shon has acknowledged that his agency did not always seek required approval from the department's governing board before accepting donations.

Shon left his job with the state in October.

Shon said he was given the option of resigning or being terminated, and he chose to leave.

In addition, per a reporter for an Austin television station,

Shon spent a great deal of his time traveling around the country promoting the TMAP treatment guidelines.

Shon made at least 84 trips. Many of the trips were courtesy of the drug companies whose drugs are specified in TMAP and have a financial interest in getting other states to adopt the program.

'So when ever you were going on trips to speak on behalf of this and the money was coming from the pharmaceutical companies were you ever aware that it might look like a conflict of interest,' CBS 42’s Nanci Wilson asked.

'I think that it possible could, but I thought that given the fact that this is how conferences and education works, I didn't think that this was really any different then what was going on anywhere else,' Shon said.

But Shon's trips to Pennsylvania weren't business as usual.

'The check originated as an unrestricted educational grant from Janssen to the Harrisburg State Hospital here in Pennsylvania,' Allen Jones said. 'However, the check was deposited to an off the books account and a separate check written out to Shon in the exact amount of the unrestricted educational grant. And while they called it an unrestricted grant, the supporting documentation clearly, clearly established that the purpose of the monies was to bring Shon to Pennsylvania to sell the TMAP program to Pennsylvanian officials.'

Before commenting, I need to acknowledge that the story above is based only on allegations, so far. The law-suit has not gone to trial, and there may be more than one side to this story.

Nonetheless, the allegations are striking. We have previously posted on allegations of attempts to influence guidelines by those trying to sell drugs, devices, or services that such guidelines may support. However, in the current case the allegations were of attempts to influence state mandated treatment algorithms (the Texas Implementation of Medication Algorithms, or TIMA), not mere guidelines. (As best as I can tell from the TMAP web-site, particularly its FAQ section, these algorithms are mandatory for all state mental health outpatient facilities.)

If nothing else, this reinforces the need for physicians, health care professionals, and patients to be extremely skeptical about how guidelines are written, and who has influenced their writing.

Parenthetically, note that this skepticism should extend to guidelines labelled as "evidence-based." The TMAP algorithms are described as evidence based, but I can find nothing on the TMAP web-site that explains how the process used to develop them fit this definition.

ADDENDUM (12/20/2006): See also these posts (here and here) on Clinical Psychology and Psychiatry.